Company registration in Kenya.

Company registration in Kenya.

Ready to turn your Kenyan business dream into reality?  Company registration in kenya is your first step towards success.  This blog cuts through the confusion and provides a clear roadmap for company registration in Kenya,Business name search in Kenya,company registration requirements in Kenya and business types.  Get ready to navigate the process with ease, unlock exciting opportunities, and watch your Kenyan venture flourish!

Step by step guide on company registration process in Kenya.

1: Pre-Registration

~Choose a Company Name: Brainstorm at least 3 unique names and check availability.

~Gather Information: Prepare details about your company, including its objectives, directors (both resident and non-resident), shareholders (if different from directors), and registered office address. You’ll also need passport copies, passport photos, and Kenyan Revenue Authority (KRA) PIN certificates for all directors (if applicable).

2: Online Registration

~Fill Out Forms: Complete the online company registration forms (CR1, CR2, CR8) and the statement of nominal capital. You’ll need your chosen company name and prepared information here.

3: Submission and Payment

~Submit Application: Electronically submit the filled forms and any required supporting documents through the eCitizen portal.

~Pay Fees: Pay the government registration fee using the eCitizen platform.

Approval and post-registration

~Review and Approval: The Registrar of Companies will review your application. This may take a few days.

~Certificate of Incorporation: Upon approval, you’ll receive a Certificate of Incorporation, making your company officially registered.

Additional Steps on company registration in Kenya

I. Tax Registration: Register your company and directors for tax purposes with the Kenya Revenue Authority (KRA).

II. Social Security Registrations:

• A. NHIF Registration: Register your company with the National Hospital Insurance Fund (NHIF).
• B. NSSF Registration: Register your company with the National Social Security Fund (NSSF).

III. Business Permit:

• Issued by the local county government to authorize business operations within their jurisdiction.
• Unified Business Permit (formerly Single Business Permit): Most common type, consolidates several licenses for a streamlined process. Typically includes:
  • a. Trading License: Authorizes a specific trade or business activity at a particular location.
  • b. Fire Safety Certificate: Verifies business premises meet fire safety regulations.
  • c. Public Health Certificate (optional): Confirms compliance with public health standards (required for food handling or public interaction).

Business Structures in Kenya

Choosing the right legal structure for your Kenyan business is crucial. Here’s a breakdown of the most common options:

1. Sole Proprietorship:

Ideal for small, locally-owned businesses, sole proprietorships offer ease of setup and complete control for the owner. However, the owner bears unlimited personal liability for all debts and obligations. Think of it as an extension of yourself, lacking a separate legal identity.

2. Partnerships: Sharing the Journey

Partnerships bring together two or more individuals to co-manage a business.

• General Partnership: All partners share profits, losses, and unlimited liability. Trust and clear communication are essential.
• Limited Partnership (LP): Offers some liability protection, with at least one “limited partner” whose financial risk is capped by their investment.

3. Limited Liability Company (LLC): A Popular Choice for Growth

LLCs are a favorite for businesses seeking limited liability protection. This means owners’ personal assets are shielded from company debts. LLCs offer a more structured environment compared to sole proprietorships or partnerships, but setting one up involves more complex registration and ongoing formalities. Additionally, this structure is the most suitable option for foreign investors in Kenya.

4. Company Limited by Guarantee (CLG): Social Impact

CLGs are not about profit generation, but creating positive social change. Commonly used by non-profits and social enterprises, members contribute a guaranteed amount in case of liquidation, but this amount is typically symbolic. Unlike other structures, CLGs do not have share capital.

Choosing the Right Structure for company registration in Kenya

• The best structure for your business depends on factors like size, liability protection needs, ownership structure, and future growth plans. It’s recommended to consult with a legal professional to determine the most suitable option for your specific circumstances.

Requirements for Company registration in Kenya;

Foreign investors in Kenya have two main options for establishing a business presence: branches and subsidiaries.

Branches are essentially extensions of the existing foreign company. They lack a separate legal identity, inherit the parent company’s liability, and face a higher corporate tax rate (37.5%). The upside? Setting up a branch is good, However, it offers less flexibility and control over Kenyan operations.

On the other hand, a subsidiary is a distinct legal entity registered within Kenya. This structure limits the foreign investor’s liability to the subsidiary’s assets, potentially qualifies for a lower tax rate (usually 30% for resident companies), and allows for greater flexibility for future growth within Kenya.

Branch: Documents required
~Certified copy of the parent company’s certificate of incorporation.
~Valid travel passports of all the beneficial owners of the parent company, their physical address,email address,phone number,occupation and passport size photograph.
~Details of the local representative (Copy of ID, Physical address, email address and phone number)
~Three preferred names of the branch.
~The share apportionment.
~A brief description of the branch activities.

Subsidiary/Independent Requirements for your company registration in Kenya
~A local representative (Details on national ID,Physical address,email address,phone number and occupation.
~Three proposed names of the company.
~Valid travel passports for all the foreign directors/shareholders ,their physical address,email address,occupation.
~A registered address in Kenya.
~Share apportionment.
~Passport sized photograph of all the directors/shareholders.
~Brief description of the company activities.

Conclusion
That’s a wrap! Now you’re equipped to navigate the process of company registration in Kenya. With a clear roadmap and the right resources, you can transform your Kenyan business dream into a thriving reality. For more information or enquiries reach out to us for free consultation.

Relevant resources:https://afrilinkconsultants.com/foreign-investment-in-kenya/